Gold prices rose on Friday but headed for a third consecutive weekly decline, pressured by a firm US dollar and a hawkish US Federal Reserve.
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Gold prices rose on Friday on technical buying but were headed for a third straight weekly decline, pressured by a firm U.S. dollar and as a hawkish U.S. Federal Reserve curbed hopes for near-term interest rate cuts.
spot gold rose 0.4% to $4,667.93 an ounce, recovering from a nearly two-month low hit in the previous session. US Gold Futures for April delivery rose 1.3% to $4,664.
“Gold held some important technical supports in the weekly period and gold may see a recovery back to the level it broke at, around $4,800,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.
However, the bullion has lost more than 6% so far this week. Spot gold has fallen more than 10% since the US and Israeli attack on Iran on February 28.
The dollar has become one of the clearest “safe haven” winners, strengthening more than 2% so far this month. Meanwhile, the Federal Reserve held rates steady on Wednesday, echoing major central banks in developed markets, and signaling that inflation could rise.
Interest rate futures show that traders see little chance of a Fed taper this year, according to CME’s FedWatch tool.
Gold is seen as a hedge against inflation, but high interest rates weigh on it by making yield-producing assets more attractive, while a stronger dollar makes bullion more expensive for holders of other currencies.
“After a notable underperformance during the Middle East conflict, participants were willing to sell rather than buy gold and were listening for a reason to confirm their feelings,” Frappell said.
Oil prices remained above $105 a barrel after hitting $119 on Thursday, as Iran attacked energy targets overnight in the Middle East, following Israel’s attacks on Iranian natural gas facilities.
US President Donald Trump has told Israel not to repeat its attacks, and Treasury Secretary Scott Bessent has said the US could soon lift sanctions on Iranian oil stranded on tankers. Bessent said further release of crude from the US Strategic Petroleum Reserve was possible.
